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Exam 3: The Adjusting Process

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Question 31

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List the four basic types of accounts that require adjusting entries and give an example of each.

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1. Prepaid expenses; example: prepaid in...

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Question 32

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Bloom's Company pays biweekly salaries of $40,000 every other Friday for a 10-day period ending on that day. The last payday of December is Friday, December 27. Assuming the next pay period begins on Monday, December 30, journalize the adjusting entry necessary at the end of the fiscal period (December 31). $\begin{array} { | c | c | c | c | c | } \hline \text { Date } & \text { Description } & \begin{array} { c } \text { Post. } \\\text { Ref. }\end{array} & \text { Debit } & \text { Credit } \\\hline & & & & \\\hline & & & & \\\hline\end{array}$

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$40,000/10 days = $4...

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Question 33

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The adjusting entry for gym memberships earned that were previously recorded in the unearned gym memberships account is

Adjusting entries affect balance sheet accounts to the exclusion of income statement accounts.

If the debit portion of an adjusting entry is to an asset account, then the credit portion must be to a liability account.

Listed below are accounts to use for transactions (a) through (j), each identified by a number. Following this list are the transactions. You are to indicate for each transaction the accounts that should be debited and credited by placing the account number (s) in the appropriate box.? ?

The supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 of supplies was on hand. Prepare the adjusting entry for supplies.

Jordon James started JJJ Consulting on January 1. The following are the account balances at the end of the first month of business, before adjusting entries were recorded:​ Adjustment data:Supplies on hand at the end of the month, $200Unbilled consulting revenue, $700Rent expense for the month, $1,000Depreciation on equipment, $90 (a) Prepare the required adjusting entries, adding accounts as needed. (b) Prepare an adjusted trial balance for JJJ Consulting as of January 31.​​

Accumulated Depreciation and Depreciation Expense are classified, respectively, as

If there is a balance in the prepaid rent account after adjusting entries are made, it represents a (n)

Classify the following items as: (1) prepaid expense, (2) unearned revenue, (3) accrued expense, or (4) accrued revenue.​a) Fees received but not yet earnedb) Fees earned but not yet receivedc) Paid premium on a one-year insurance policyd) Property tax owed to be paid beginning of next year

As time passes, fixed assets other than land lose their capacity to provide useful services. To account for this decrease in usefulness, the cost of fixed assets is systematically allocated to expense through a process called

For each of the following, journalize the necessary adjusting entry: (a)A business pays weekly salaries of $22,000 on Friday for a five-day week ending on that day. Journalize the necessary adjusting entry at the end of the fiscal period, assuming that the fiscal period ends (1) on Tuesday or (2) on Wednesday. (b)The balance in the prepaid insurance account before adjustment at the end of the year is $18,000. Journalize the adjusting entry required under each of the following alternatives: (1) the amount of insurance expired during the year is $5,300 or (2) the amount of unexpired insurance applicable to a future period is $2,700. (c)On July 1 of the current year, a business pays $54,000 to the city for license taxes for the coming fiscal year. The same business is also required to pay an annual property tax at the end of the year. The estimated amount of the current year's property tax allocated to July is $4,800. (1) Journalize the two adjusting entries required to bring the accounts affected by the taxes up to date as of July 31. (2) What is the amount of tax expense for July? (d)The estimated depreciation on equipment for the year is $32,000.

If there is a balance in the unearned subscriptions account after adjusting entries are made, it represents a (n)

Accumulated depreciation accounts are liability accounts.

Indicate whether the following error would cause the adjusted trial balance totals to be unequal. If the error would cause the adjusted trial balance totals to be unequal, indicate whether the debit or credit total is higher and by how much.​The adjustment for accrued fees of $1,170 was journalized as a debit to Accounts Receivable for $1,170 and a credit to Fees Earned for $1,107.

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account, which of the following describes the effect of the debit portion of the entry?

How will the following adjusting journal entry affect the accounting equation? $\begin{array} { | c | r | r | } \hline \text { Unearned Subscription Revenue } & 11,500 & \\\hline \text { Subscription Revenue } & & 11,500 \\\hline\end{array}$

Generally accepted accounting principles require the accrual basis of accounting.

What is the purpose of an adjusted trial balance? What type (s) of error does it detect? What type (s) of error does it not detect?